eBay Revisited While Waiting to Buy

Written by: Marc Courtenay01/29/13 - 6:30 AM EST

Tickers in this article:
EBAY

NEW YORK ( TheStreet) -- My one and only son is a wheeler-dealer when it comes to buying and selling all kinds of items on the Internet. When he isn't working his magic using Craigslist, he's bidding or offering on the site of the "King" of online marketplaces.

eBay (EBAY) and its e-commerce business has remained a successful, American enterprise where bidders can buy and sellers can ponder the offers. When the company began in 1995 many wondered if the business model it offered would work. Today there aren't many doubters left.

Headquartered in San Jose, Calif., eBay has become a true legend in its own time. As its online site describes, "With more than 100 million active users globally (as of fourth-quarter 2011), eBay is the world's largest online marketplace, where practically anyone can buy and sell practically anything.

"..., eBay connects a diverse and passionate community of individual buyers and sellers, as well as small businesses. Their collective impact on ecommerce is staggering: In 2011, the total value of goods sold on eBay was $68.6 billion -- more than $2,100 every second."

eBay just completed four consecutive earnings quarters where it surprised on the upside. No wonder shares are trading (as of Monday) slightly below its 52-week high set on Fridayat $56.66. That brings the trailing PE ratio to over 28 and the forward (one-year) PE ratio to around 17.4.

A careful look at the five-year chart of EBAY helps us see not only its recent history but also the levels which investors had outstanding buying opportunities. Since the beginning of 2012 shares have almost doubled. We see that the share price and the trailing-twelve-month revenue per share rose in tandem.

I recently opined in an article about "The Fear Factor" that it's tempting to think EBAY is too high and unlikely to move higher. Yet, fear and greed are not how the most successful investors in history became billionaires.

Today, in his editorial at DailyWealth Editor Steve Sjuggerud explains who is "The Best Investor of the Last 30 Years..." It's a fascinating look into the mindset of one of the best in the business.

Sjuggerud writes, "Gary Shilling might have the best track record of any investor over the last 30 years...If you had invested $100,000 in Shilling's 'big idea' 30 years ago, it would be worth over $6 million today."

Gary Shilling, according to Sjuggerud, kept his focus on his "big idea." "While most investors didn't pay attention to his big idea, Shilling was right. And he never gave up on his big idea," Sjuggerlund added. That's the way the most successful, legendary thinkers have always charted their course.